Aware, Inc. Reports Third Quarter 2013 Financial Results

BEDFORD, Mass., Oct. 28, 2013 /PRNewswire/ -- Aware, Inc. (NASDAQ: AWRE), a leading supplier of biometrics software and services, today reported financial results for its third quarter ended September 30, 2013. 

Revenue for the third quarter of 2013 was $4.5 million, a decrease of 15% compared to $5.3 million in the same quarter last year. The net loss for the third quarter of 2013 was $1.2 million, or $0.05 per diluted share, which compares to net income of $10.3 million, or $0.46 per diluted share, for the same period a year ago. Net income in the third quarter of 2012 included a gain on the sale of patent assets of $15.2 million.  Operating income before patent related income in the third quarter of 2013 was a loss of $2.2 million compared to income of $1.4 million in the third quarter of 2012.

For the nine months ended September 30, 2013, revenue increased 5% to $14.9 million, compared to $14.2 million in the same period a year ago.  Net income for the nine months ended September 30, 2013 was $1.0 million, or $0.04 per diluted share. These results compared to net income of $66.3 million, or $3.03 per diluted share, for the same period a year ago. Year-to-date net income in 2012 included an $86.4 million gain on the sale of patent assets.  Operating income before patent related income for the first nine months of 2013 was $134,000 compared to $2.6 million for the same period a year ago.

Financial results for the three and nine month periods ended September 30, 2013 were materially affected by the Company's decision to shut down its DSL service assurance business.  This decision limited our ability to record revenue from our DSL service assurance business in the quarter.  We also incurred $2.8 million of costs to shutdown the business. Notwithstanding the impact on the quarter and year-to-date periods, we believe this action was necessary in light of the lack of historical profitability and the future outlook for this business.

Our biometrics business was and is unaffected by this decision and continues to perform well. We encourage you to read our third quarter Form 10-Q for more details on the financial performance of our company.

Rick Moberg, Aware's co-chief executive officer and chief financial officer, said, "While shutting down the DSL service assurance business was not an easy decision, we believe this action was in the best interests of the Company and its shareholders.  We are excited to move forward focused on growing our profitable biometrics business."

About Aware
Aware is a leading software and technology supplier for the biometrics and healthcare industries. Aware's biometrics software products and services are provided to solution vendors and system integrators for use by government agencies towards applications including border management, secure credentials, law enforcement, and national defense. Aware also provides standards-based medical imaging software products to the healthcare industry.  Aware is a publicly held company (Nasdaq: AWRE) based in Bedford, Massachusetts. www.aware.com

Safe Harbor Warning
Portions of this release contain forward-looking statements regarding future events and are subject to risks and uncertainties, such as estimates or projections of future revenue and earnings, and the growth of the biometrics markets. Aware wishes to caution you that there are factors that could cause actual results to differ materially from the results indicated by such statements.

General factors include, but are not limited to: our quarterly results are unpredictable and may fluctuate significantly; our business is subject to rapid technological change; we face intense competition from a wide range of competitors; our intellectual property is subject to limited protection; our business may be affected by our use of open source software; our business may be affected by government regulations; adverse economic conditions; and our ability to obtain or enforce patents could be affected by new laws, regulations or rules. Biometric factors include, but are not limited to: market acceptance of our biometric technologies and products; changes in contracting practices of government or law enforcement agencies; the failure of the biometrics market to experience continued growth; announcements or introductions of new technologies or products by our competitors; failures or problems in our biometric software products; delays in the adoption of new industry biometric standards; growth of proprietary biometric systems which do not conform to industry standards; our ability to sell services contracts in a manner that is consistent with our business model; our ability to deliver services contract milestones; and our dependence on third party contractors and consultants to deliver certain services contract milestones.

We refer you to the documents Aware files from time to time with the Securities and Exchange Commission, specifically the section titled Risk Factors in our annual report on Form 10-K for the fiscal year ended December 31, 2012 and other reports and filings made with the Securities and Exchange Commission.

Aware is a trademark or registered trademark of Aware, Inc.
Any other trademarks appearing herein are the property of their respective owners.

 


AWARE, INC

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(unaudited)




Three Months Ended
September 30,


Nine Months Ended
September 30,



2013


2012


2013


2012

Revenue:









    Software licenses


$2,334


$3,387


$7,704


$8,070

    Software maintenance


1,023


661


3,187


2,471

    Services


943


724


2,179


2,100

    Hardware sales


-


-


1,129


-

    Royalties


170


484


737


1,599

           Total revenue


4,470


5,256


14,936


14,240










Costs and expenses:









    Cost of hardware sales


-


-


813


-

    Cost of services


494


421


1,075


1,138

    Research and development


1,452


1,466


4,504


4,431

    Selling and marketing


931


1,069


2,998


3,143

    General and administrative


922


854


2,580


2,915

    Exit costs


2,832


-


2,832


-

       Total costs and expenses


6,631


3,810


14,802


11,627










Operating income (loss) before patent related income


(2,161)


1,446


134


2,613

Gain on sale of patent assets


-


15,167


-


86,394

Income from patent arrangement


-


-


780


-

Operating income (loss) after patent related income


(2,161)


16,613


914


89,007

Other income


27


-


27


85

Interest income


80


45


239


137

Income (loss) from continuing operations before income taxes


(2,054)


16,658


1,180


89,229

Provision for (benefit from) income taxes


(901)


6,578


169


23,248

Income (loss) from continuing operations


(1,153)


10,080


1,011


65,981

Income from discontinued operations, net of income taxes


-


217


-


360










Net income (loss)


($1,153)


$10,297


$1,011


$66,341










Basic net income (loss) per share:









   Basic net income (loss) per share from continuing operations


($0.05)


$0.45


$0.04


$3.05

   Basic net income per share from discontinued operations


0.00


0.01


0.00


0.02

Basic net income (loss) per share


($0.05)


$0.46


$0.04


$3.07










Diluted net income (loss) per share:









   Diluted net income (loss) per share from continuing operations


($0.05)


$0.45


$0.04


$3.01

   Diluted net income per share from discontinued operations


0.00


0.01


0.00


0.02

Diluted net income (loss) per share


($0.05)


$0.46


$0.04


$3.03










Weighted-average shares – basic


22,571


22,339


22,533


21,609

Weighted-average shares - diluted


22,571


22,501


22,623


21,888










Comprehensive income (loss):









   Net income (loss) 


($1,153)


$10,297


$1,011


$66,341

   Other comprehensive income:









      Unrealized gains (losses) on available for sale securities


(26)


(4)


(6)


16

Comprehensive income (loss)


($1,179)


$10,293


$1,005


$66,357

 

AWARE, INC

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(unaudited)




September 30,

2013


December 31,

2012

 

ASSETS





     Cash and investments


$78,380


$73,084

     Accounts receivable, net


2,754


4,578

     Property and equipment, net


5,644


5,904

     Deferred tax assets


1,575


1,760

     Other assets, net


1,294


528






     Total assets


$89,647


$85,854






 

 

LIABILITIES AND STOCKHOLDERS' EQUITY










     Total current liabilities


$6,350


$3,639

     Long-term deferred revenue


40


319

     Total stockholders' equity


83,257


81,896






     Total liabilities and stockholders' equity


$89,647


$85,854

 

SOURCE Aware, Inc.



RELATED LINKS
http://www.aware.com

More by this Source


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

 

PR Newswire Membership

Fill out a PR Newswire membership form or contact us at (888) 776-0942.

Learn about PR Newswire services

Request more information about PR Newswire products and services or call us at (888) 776-0942.